Why Lipa Payments is backing Bluetooth in Africa's contactless payments future ?

The current state-of-the-art technologies powering contactless payments, Near Field Communication (NFC) and Quick Response Codes (QR Codes), were discussed in our previous blog titled, “The technologies driving contactless payments”.

In this blog we will discuss why Lipa Payments is backing Bluetooth in Africa’s contactless payments future. Bluetooth dates back to 1989 and was commonly used to transfer files between two devices and is still commonly used in the connection of wireless headphones and wireless speakers. Bluetooth Low Energy (BLE) only emerged in 2011 as part of Bluetooth 4.0 to enable very low power applications.

At Lipa Payments, we believe that BLE is the perfect alternative to NFC payments for low-end and low-cost smartphones.

BLE allows the same ease-of-use experienced when using NFC solutions like Apple Pay and Samsung Pay.  Let us take a look at ease-of-use both from a consumer and a merchants perspective.

Consumer perspective - Ease of making payment 

Payment transfer solutions like EFT and e-Wallet solutions require users to key-in merchant information such as their 10-digit cellphone number or bank account number in order to make a payment. Typing in a merchant's account number every time you pay is not a seamless payment experience and is not well suited for time-sensitive scenarios, like having to pay at a spaza shop whilst there is a long queue behind you. Mobile solutions using NFC and QR technology address this problem quite well.

Merchant perspective - Ease of receiving payment confirmation 

EFT and e-Wallet solutions provide the merchant with limited payment success feedback as the merchant's source of payment confirmation of payment is often not in real-time. Users can send fake e-wallet notifications and fake proof of payment documents. Real-time EFT solves this problem but it is currently an expensive option for low-value transactions (Real-time, low-cost central-bank payment infrastructure like the Rapid Payments Programme in South Africa can address this challenge). 

Mobile solutions using NFC technology provide a merchant with feedback on payment success as the transaction is processed on the merchant-side. 

QR differs from NFC based mobile payments because a consumer requires online connectivity as the payment is processed on the consumer device instead of the merchant device. QR codes are a unidirectional communication mechanism. This means that two devices cannot communicate back and forth with QR as is possible with NFC.

This means that after a consumer's device scans a merchant’s QR code, the consumer must have mobile data and connectivity to go online and process the payment. The merchant's device then has to also connect to the internet to check if the payment was successful otherwise the merchant would have to trust the "proof of payment" which is displayed on the consumer's app (not the best user-experience). 

We also believe that BLE will enable new payment experiences all together.

BLE has the potential to enable new payment experiences that NFC and QR cannot. Imagine a group of friends at a restaurant or a nightclub all paying for their portion of the bill directly from their smartphones all at the same time. No more waiting for the card machine to be passed around and for every person to enter their pass code. With BLE this is possible. With BLE we will enable a church congregation of more than 500 people to pay at the same time with ease.

At Lipa Payments we are re-imagining what it means to transition away from cash and towards becoming a cashless society.

If you would like to find out more, contact us or book a demo.